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Administration June 12, 2000
Northrop Grounded By Lower Pension Income
December 6, 2000 (PLANSPONSOR.com) - Northrop
Grumman shares slid more than 2% Wednesday, a day after
announcing that declining pension fund earnings could trim 45
cents/share from its 2001 earnings.
Reported by Nevin E. Adams
Pension fund proceeds now account for about half of Northrop’s earnings.
The announcement came after the market closed on Tuesday.
Aside from the pension impact, corporate earnings are expected to rise 10-15% next year, according to the nation’s fifth largest defense contractor.
Companies are required to report pension liabilities as such on their balance sheet, treatment that necessitated many an analyst explanation a decade ago.
However, the run up in equity values over the past several years has placed many pension plans in a surplus, with assets exceeding the pension obligation – and providing a boost to the bottom line.